The markets didn’t really get anything from the newly revealed details of the US-China trade deal, instead drifting lower after the bell.
With the agreement all ready to be signed tomorrow, Washington removed the ‘currency manipulator’ label from China – a symbolic gesture rather than tangible one, but nevertheless another example of thawing relationships between the two superpowers.
This helped send the yuan to a 5-month high, but did little for the Western indices. Instead the DAX and CAC fell 0.5% apiece, with the Dow Jones set to drop 0.4% later this afternoon. The FTSE avoided the same kind of losses, though was still down a handful of points.
The trouble is, the positive aspects of the trade deal are pretty thoroughly priced in. In contrast, any rogue comments from Donald Trump in the coming days – especially those related to ‘phase two’, if the US and China ever get to that point – may then have a disproportionate impact on the markets, good or bad.
The reason the FTSE was able to outperform its peers was the continued weakening of sterling. The pound lost another 0.2% against dollar and euro alike, the ongoing speculation of an incoming interest rate cut, heightened by Monday’s dreadful GDP reading, weighing on the currency.
It was, broadly, a terrible Christmas for UK retailers. However, as is often the case, boohoo (LON:BOOH) managed to buck the trends that have afflicted its high street peers, crying tears of joy after a record quarter. For the 4 months to the end of 2019 revenue jumped 44%, causing it to lift its forecast growth for the year to 40-42% against previous estimates of 33-39%. That increase was enough to send the stock to a fresh all-time high, the fashion brand rising 3.3% to strike £3.28.
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